Debt Forgiveness Under the Paycheck Protection Program
Many of our small business clients have received funding of their Paycheck Protection Program SBA Loans. The first step to get full or partial forgiveness under the program is to determine the number of FTE’s (Full Time Equivalent) employees that a small business must maintain during the eight-week period following funding of the loan. Unfortunately, guidance on this calculation is very limited from the SBA and Congress.
The FTE calculation should be done immediately, because the loan forgiveness is based on maintaining your average number of FTE employees during the entire eight-week period starting on the date of loan funding.
The amount of loan forgiveness is reduced by the quotient of the following:
- Monthly average FTE employees during the eight-week covered period divided by the monthly average FTE employees of either February 15, 2019 – June 30, 2019 or January 1, 2020 – February 29, 2020 (using the lower figure)
The key is to rehire employees immediately to maximize your loan forgiveness.
TRS CPA Group has a team ready to help you maximize your loan forgiveness. Please feel free to give us a call if you need our assistance.